Across the country, in almost every demographic, Americans earn less today than they did in June 2009, when the recovery technically started. As of June, the median household income for all Americans was $50,964, or 4.8 percent lower than its level three years earlier, when the inflation-adjusted median income was $53,508.
The decline looks even worse when comparing today’s incomes to those when the recession began in December 2007. Then, the median household income was $54,916, meaning that incomes have fallen 7.2 percent since the economy last peaked.
Income drops vary significantly by age, though. Households led by people between the ages of 55 and 64 have taken the biggest hit; their household incomes have fallen to $55,748 from $61,716 over the last three years, a decline of 9.7 percent.
Sustained unemployment among older workers may be at least partly to blame for this decline. Unemployment rates for that age group are relatively low, but once older workers lose their jobs, they have an unusually hard time finding re-employment. And even when they do find new work, they usually take a pay cut.
“I was laid off in ’08, and I never really managed to get back into the job market,” said Jan Thomas, 62, who lives in Sarasota, Fla. She decided to apply for Social Security early, even though that means her benefits are lower than they would be if she had waited until 66. “I’ve pretty much gone through my savings at this point. You know, taking money out of one account, then the other. Then it all just kind of went poof.”
Younger Americans have also felt income declines in the three years since the recovery began. The inflation-adjusted median household income for those 25 to 34 fell 8.9 percent, while that for people under age 25 fell 6.1 percent.
Incomes for the oldest Americans, on the other hand, have risen steadily since the recovery began. Among those 65 to 74, the inflation-adjusted median household income rose 6.5 percent (to $42,113 from $39,548), and among those age 75 and older, the increase was 2.8 percent (to $26,991 from $26,244).
It’s not clear why incomes rose for older people when as they fell for everyone else.
This may be because older Americans are working longer, taking in more income at more advanced ages. Perhaps they are working longer partly to compensate for the decline in the value of their homes. Rising employment rates among older people predate the housing bust, however.
The share of people over 65 who have jobs has been rising since the early 1990s; in 2011, 16.7 of people over 65 worked, compared with 11.1 percent two decades earlier.
The chart below — which is based on a different Census Bureau survey that goes through 2010 only, unfortunately — shows that almost all age groups have actually seen their income rise over most of the last 50 years, although incomes for non-seniors have been much more volatile. (Remember, though, that during recessions older people have at least some steady income from Social Security.)